Winds of change: Shell ditches renewable stake amid fears of a retreat to carbons
The future of the world's largest offshore wind farm and a symbol of Britain's renewable energy future was thrown into doubt last night after it emerged that Shell was backing out of the project and indicated it would prefer to invest in more lucrative oil schemes.
Shell said the decision to sell its 33% stake was part of an "ongoing review of projects and investment choices" and was not part of any major rethink about renewables versus other oil and gas projects.
But environmentalists will see the decision to drop one of only two renewable schemes being worked on by Shell in Britain as a further sign that the company is retreating back to hydrocarbons at a time when the price of oil has risen to about $120 a barrel.
Shell, which earlier this week reported first quarter profits of $7bn, has been selling off much of its solar business while moving more into Canada's carbon-heavy tar sands. The Department for Business said last night that a number of successful offshore wind projects had seen changes of ownership in the past "and we would therefore anticipate that the project will be able to proceed".
"The current economics of the project are marginal at best - with rising steel prices, bottlenecks in turbine supply and competition from the rest of the world all moving against us."
No guarantees
· Plans for one of Europe's largest onshore wind farms in the Outer Hebrides were formally rejected after Scottish ministers
· BP and partners Southern and Scottish Energy dropped plans for an innovative carbon capture and storage (CCS) experiment at Peterhead, Scotland, blaming lack of government guarantees.
· BP considers floating or selling all or part of its renewable operations, which it believes are worth $7bn.
· Britain has some support programmes for renewables but spending has virtually stalled. It is one of the worst performing countries among its EU peers, producing only 2% of its energy from renewables and on current policies will miss the EU target of 15% by 2020.
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